Blogging the Bear Stearns Trial: What's Chump Change to You?

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Maybe 75 cents? $10? How about $1 million?

Judge Frederic Block raised this question with two investors who lost money in the collapse of the Bear Stearns hedge funds. Both testified for the government this week in its criminal case against managers Ralph Cioffi and Matthew Tannin.

Judge Block's exchange with David Grain, CEO of Grain Communications Group

JUDGE: You basically were curious. You lost your money. You wanted to find out why.

GRAIN: Well, there were two things. It was I lost my money. I wanted to understand how. More than that, if I was sitting at the table and I was the chump and everyone else knew, I was pissed off about that, and I wanted to understand that.

JUDGE: You only had $1 million.

GRAIN: Only $1 million is $1 million.

JUDGE: It was chump change to you.

GRAIN: Chump change to who?

JUDGE: You didn't pay attention to it. You didn't spend a lot of time. Did you ask any questions before this went south to find out what was happening with the management with the fund?

GRAIN: Not before it started to go south.

JUDGE: I understand it's human nature. You just lost this chump change.

Judge Block's exchange with Benjamin Schliemann, founder of Accumulus Capital Management

JUDGE: How much money are you talking about?

SCHLIEMANN: I'm talking about $1.3 million.

JUDGE: About $1.3 million is your entire net worth, and it's invested in the fund?

SCHLIEMANN: Liquid net worth, yes.

JUDGE: The other is real estate?

SCHLIEMANN: Correct.

JUDGE: This is your fund. You manage it?

SCHLIEMANN: Correct.

JUDGE: You have $1.3 million of your money in which is your entire liquid net worth?

SCHLIEMANN: Correct.

PROSECUTION: You would not refer to $1.3 million as chump change?

SCHLIEMANN: No, I would not.

JUDGE: Depends whether you had a lot more money. If you had $100 million, you might think $1 million would be chump change.

SCHLIEMANN: I probably would not use that term.

JUDGE: Speaking elegantly as you would not use that term. Judges from Brooklyn might use it.